Embryonic stem cells (ESCs) are considered a promising cell source for regenerative medicine. Intensive research over the past decade has led to the possibility that ESC-differentiated cells (ESC-DCs) could be used for the treatment of human diseases. However, increasing evidence indicates that ESC-DCs generated by the current differentiation methods are not fully functional. Recent studies indicate that ESC-DCs lack innate immunity to a wide range of infectious agents. When used in the patient, ESC-DCs would be placed in a wound site that is exposed to various pathogens and inflammatory cytokines; therefore, their viability and functionality could be compromised if the cells do not have competent immunity. We recently demonstrated that ESCs are intrinsically deficient in expressing type-I IFN and inflammatory cytokines. This finding explains the lack of innate immunity in ESC-DCs and has led to our central hypothesis that innate immunity is not developed in ESCs and cannot be effectively induced by current methods of differentiation, but it could be induced if proper immunostimulation is provided during differentiation. The proposed study aims to understand the molecular mechanisms that control innate immunity and to develop differentiation strategies that generate ESC-DCs with competent immunity. Fibroblasts (FBs) are major cells that play key roles in tissue formation and in modulating tissue immune/inflammatory responses. Using ESC-differentiated FBs (ESC-FBs) as a model system, we will determine the molecular basis for innate immunity deficiency in ESCs and identify the factors that stimulate innate immunity development (aim 1). We will then develop novel strategies that utilize IFN?, viral RNA analogs, and lipopolysaccharide as immunostimulants to promote innate immunity during differentiation (aim 2). The innate immunity of ESC-FBs will be comparatively analyzed with naturally differentiated FBs by in vitro models and will be evaluated with a syngeneic mouse in vivo model, where immune and inflammatory responses in implanted ESC-FBs will be assessed after the host is challenged with bacterial and viral infections (aim 3). We expect that the results will lead to the development of differentiation strategies that could fundamentally transform the current methods and achieve a better understanding of mechanisms that control innate immunity development during embryogenesis.